C.I.A. Security Officer Is Freed In Pakistan as Redress Is Paid

By CARLOTTA GALL and MARK MAZZETTI; Carlotta Gall reported from Lahore, and Mark Mazzetti from Washington. Reporting was contributed by Waqar Gillani in Lahore, Jane Perlez in New York, and Eric Schmitt in Washington.

Published: March 17, 2011

LAHORE, Pakistan -- A C.I.A. security officer jailed for killing two Pakistanis on a crowded Lahore street was released Wednesday after weeks of secret negotiations between American and Pakistani officials, a pledge of millions of dollars in ''blood money'' to the victims' families, and quiet political pressure by Pakistani officials on the courts.

The fatal shootings by Raymond A. Davis, who was immediately flown out of the country to Kabul, Afghanistan, had ignited a furor here and brought relations between the C.I.A. and Pakistan's spy service to perhaps their lowest ebb since the Sept. 11 attacks.

Mr. Davis's release appears to have temporarily cooled frictions between the two wary allies, but it left unresolved many of the irritants that strained ties in the first place. American officials insisted on Wednesday that the C.I.A. made no pledges to scale back covert operations in Pakistan or to give the Pakistani government or its intelligence agency a roster of American spies operating in the country -- assertions that Pakistani officials disputed.

The Davis episode was particularly sensitive because of the resentment among Pakistanis who believe that a growing American security contingent roams the country with relative impunity. Many Pakistanis were also furious that for weeks after the shooting American officials appeared to show little public sympathy for the victims.

But the case was resolved after Pakistani officials met for more than six hours on Wednesday with family members of the victims to arrange compensation known here as ''blood money.'' Such agreements are an accepted part of the law in Pakistan. Lawyers for the families and Pakistani officials said the total compensation was about $2.3 million.

The settlement, coming as Mr. Davis was facing indictment on murder charges in a lower court, shed no new light on the circumstances of the Jan. 27 killings. The United States ambassador in Islamabad announced Wednesday that the Justice Department would investigate the shooting, which Mr. Davis said occurred after two motorcyclists tried to rob him while he was driving alone.

Pakistani and American officials said Wednesday that they were particularly eager to resolve the case before the Lahore High Court could rule on whether Mr. Davis should be granted diplomatic immunity -- a protection that American officials insisted he was entitled to. A ruling against Mr. Davis, American officials said, could have set a precedent for other countries to deny C.I.A. operatives diplomatic protections.

Although details remain murky, the officials suggested that Pakistan's government leaned on influential politicians in Lahore -- including the family of Nawaz Sharif, the leader of the main opposition party -- to press the high court to delay ruling on the Davis case. Settling the case with a compensation agreement and without a high court decision also allowed Pakistan's weak civilian government to save face.

American officials impressed upon both Pakistani civilian officials and Gen. Ashfaq Parvez Kayani, Pakistan's military chief, that Congress could decide to hold up more than $3 billion in annual aid to Pakistan if Mr. Davis were not freed.

In remarks to reporters in Cairo, Secretary of State Hillary Rodham Clinton thanked Pakistani officials and the families of the two men for agreeing to release Mr. Davis. ''We appreciate the actions they took that enabled Mr. Davis to leave Pakistan and head back home,'' she said.

Ms. Clinton said that the United States ''did not pay any compensation,'' but deflected questions about whether the families had been paid at America's request. American officials said that it was members of Pakistan's government who pledged to pay the blood money to the families, and that the American government would reimburse the Pakistani government.

The payments were first raised with Pakistani officials by Senator John Kerry during a trip to Islamabad last month. Since then, American and Pakistani officials have regularly discussed the matter, and the C.I.A. director, Leon E. Panetta, has spoken frequently to the ISI chief, Lt. Gen Ahmad Shuja Pasha.

The Davis affair was particularly thorny for the relationship between the two spy services, since Mr. Davis's covert group in Lahore had been assigned to gather intelligence about the militant group Lashkar-e-Taiba, which for years has been nurtured by the ISI to carry out attacks inside India.

It remains to be seen whether resolving the case will reduce tensions between the C.I.A. and ISI, but one American official said that Mr. Panetta had made no concrete pledges to curtail agency operations in exchange for Mr. Davis's release.

''There was absolutely no quid pro quo between the United States and the Pakistani government,'' the official said.

But a Pakistani official disagreed, saying that the C.I.A. had agreed to scale back the number of Pakistan operations it conducted without the ISI's consent. ''Our demand also included to treat us as allies, with trust and respect and not operate behind our backs,'' the official said.

The Pakistani government seems to have begun negotiating directly with the victims' families within the last week, as the court proceedings against Mr. Davis loomed. A lawyer attached to the Supreme Court in Islamabad, Raja Irshad Kayani, said he was contacted by the families just two days ago to negotiate the agreement for them and represent them in court.

The lawyer previously representing the families, Asad Manzoor Butt, said Wednesday that his clients had become impossible to reach by phone. When he arrived with a colleague to attend Wednesday's court hearing, he said, he was held in a room for four hours and not permitted to enter the courtroom or meet with the families.

Meanwhile, Mr. Irshad arrived from Islamabad just in time, as the lower court judge was beginning proceedings to indict Mr. Davis. The lawyer presented the judge with a signed agreement under which both families accepted cash payments and agreed to drop the murder charges.

It remains unclear whether the families were coerced into accepting the deal, but the government clearly maneuvered to separate them from Mr. Butt and the religious parties that have been demonstrating against the release of the American contractor. Mr. Butt said he had offered his services to the families for free at the request of members of the religious party, Jamaat-e-Islami.

Religious parties and anti-American groups, which have been demanding a death sentence for Mr. Davis, are expected to continue to press the government to seek justice in the killing of a third man, who was knocked from his motorcycle by a United States Consulate car that was rushing to the rescue of Mr. Davis at the time of the killings.

Lawyers who attended Wednesday's court proceedings said that the American consul general for Lahore was present in court. The lawyers said that Mr. Davis sat on a bench inside an iron cage, his hands cuffed in front of him.

PHOTOS: Raymond A. Davis fatally shot two Pakistanis in January. (PHOTOGRAPH BY HAMZA AHMED/ASSOCIATED PRESS) (A1); The police clashed with protesters on Wednesday at the United States Consulate in Lahore after the release of Raymond A. Davis.; The Pakistani police escorted a vehicle carrying American officials leaving the jail Wednesday after a hearing for Mr. Davis. (PHOTOGRAPHS BY ARIF ALI/AGENCE FRANCE-PRESSE -- GETTY IMAGES) (A3)